Malaysia’s super rich top global average in property investment plans

The number of Malaysians looking to invest in properties abroad outstrips the global average, says report.

KUALA LUMPUR: While most Malaysians are grappling with the high cost of living and struggling to make ends meet, the super rich are planning to become even richer by investing in various property markets.

About 43% of Malaysia’s super rich plan to invest in properties abroad in the next few years, according to property consultancy firm Knight Frank.

This, the firm noted in its Wealth Report 2018 launched yesterday, was higher than the global average of 34%. These proposed property acquisitions exclude a primary residence or second home.

According to the report, 45% of Malaysia’s wealthiest are also thinking of buying an investment property locally. This, too, is higher than the global average of 43%.

The favourite overseas property-purchase countries of Malaysia’s super rich – classified as ultra-high-net-worth individuals (UHNWIs) – are Australia, Singapore and the UK.

Knight Frank defines UHNWIs as those with a personal net worth of more than US$50 million (RM193 million) in net assets.

One of the major areas of interest of Malaysian UHNWIs is purpose-built student accommodation, something unheard of in the past, The Edge quoted Knight Frank Malaysia executive director of capital markets James Buckley as saying.

“Malaysians are very familiar with investing in real estate and are also looking at diversifying outside the country. Student accommodation over the last five years has been the star of the UK property, consistently delivering the UK’s highest property rental yields. An increasing number of students and a structural under-supply have driven growth rate and occupancy,” he said.

Knight Frank Malaysia international project marketing associate director Dominic Heaton-Watson told The Edge: “Education will always remain a key driver (to the UK market) and it remains strong. Education is also less correlated to the health of the general economy, which investors are attracted to.”

The wealth report included findings from the Attitudes Survey 2018 which showed the factors affecting the investment and lifestyle decisions of wealthy individuals annually, based on responses from 541 top bankers and wealth advisers, The Edge reported.

In the survey, respondents said 56% of their clients had increased their property investments compared with 62% who increased their exposure to equities.

Overall, the report said, UHNWIs in Asia named the UK, the US and Singapore as their three favourite overseas destinations for new homes in 2018.

The firm’s City Wealth Index – which identifies cities that matter to the ultra-wealthy by analysing current wealth, investment, lifestyle and economic performance – shows New York beating last year’s winner London to take top spot.

The report said investors were drawn to super-cities such as London and New York because of their transparency, liquidity, language, law, best-in-class advisers and current stability.

“Asian cities took three of the top 10 spots in the City Wealth Index. Singapore’s standout ranking is a reflection of its strong performance across all criteria, with an especially impressive showing in lifestyle, which is considered increasingly important in the world’s international community.

“Tokyo and Hong Kong, the other Asian hubs that made the top grouping, underlined their status as cities attracting attention from the world’s wealthy, with notable attention continuing to come from mainland China investors,” said Knight Frank Asia-Pacific head of research Nicholas Holt.